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EPTE Newsletter from Japan: PCB Industry Takes a Hit

The Japanese Ministry of Economy, Trading, and Industry (METI) released June’s production data for the PCB industry. We now have a six-month snapshot for sales in 2013, and can forecast second half results.

Total volume shipped in June was 1.06 million square meters, and revenue for the same period was 41.47 billion yen; this represents an increase of 2.5% and 4.1%, respectively, compared with the previous month. The growths are negligible; however, when compared year over year, volume declined by 25.4% and revenue declined by 21.7% for the same month. Year-to-date numbers came in at 6.17 million square meters for volume and 234.24 billion yen for revenue. This represents a decline of 27.4% and 24.1%, respectively. The Japanese printed circuit industry is suffering a worse year than 2009--the year after the global recession. The Japanese Government continues to report on a remarkable rebound to the economy; however, it is mainly affecting financials. The Tokyo stock market took a breather after the landside victory for the governing liberal democrats in the parliamentary elections in July.

The Japanese electronics and circuit board industry show no signs of recovery. Sales of core products that include flat panel TVs, cellular phones, and digital cameras continue to show weakness and are down compared to the previous year. PCB demand is down since the Japanese circuit board manufacturers supply the electronics companies for the products mentioned above. Exports are also weakened in spite of the declining yen. Flex circuit manufacturers and substrate manufacturers enjoyed healthy export sales until the global electronics market entered a long economic slump. Add in stiff competition from Taiwan and Korea and you can see why there is pressure on sales for Japanese manufacturers. The circuit board industry in Taiwan is alive and well. It has infiltrated the Japanese market and helped out with a weak yen.

The Japanese circuit board industry is looking at a 20% reduction in sales for 2013 compared with the previous year if there is not significant rebound in business. This scenario is similar to the one felt within the American circuit board industry when the IT bubble burst in 2001.I think only the strong will survive, but they will survive. 

Dominique K. Numakura, dnumakura@dknresearch.com DKN Research, www.dknresearchllc.com

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Headlines of the Week

(Please contact haverhill@dknreseach.com for further information on the news.)

1. Showa Denko (Major chemical company in Japan) 8/1The company will install new manufacturing equipment using ethyl acetate to satisfy the strong demand for electronic materials with an annual capacity of 100,000 tons.2. Toshiba (Major electronics & electric company in Japan) 8/2The company has received an order for a heavy particle beam irradiation system with the first super conductor magnet from the National Institute of Radiological Science (NIRS) for cancer treatment. 3. Taiyo Yuden (Major component manufacturer in Japan) 8/5The manufacturer has produced a new product category of reliable components that pass AEC-Q200 for automobiles and industrial applications.4. Kyocera (Major electronics company in Japan) 8/7The company has acquired Toppan NEC Circuit Solution, a major PCB manufacturer in Japan.5. Panasonic (Major electronics company in Japan) 8/8The company has developed a new secondary battery series, “CadNica GT.” The new batteries work under severe circumstances at -40 degrees Celcius.6. Samsung Electronics (Major electronics company in Korea) 8/16The company will acquire Novaled, a German OLED manufacturer for a cost of 260 million euro.7. SEAJ (Industry organization in Japan) 8/19 The organization reports that July bookings for FPD manufacturing equipment in Japan declined 44% from the previous month. The book-to-bill ratio dropped to 0.45.8. STATS ChipPAC (IC packaging firm in Singapore) 8/20The firm has established a new embedded wafer level technology, "eWLB," with 0.3 mm height.9. Ricoh (Major electronics company in Japan) 8/22The company has rolled out a new A4-sized hybrid color office machine, the “RICOH MP C305 SP,” with a printing speed of 30 sheets per minute.10. Innolux (Major display panel supplier in Taiwan) 8/27The supplier will ship over one million units of 39” and 40” HD LCD panels for Ultra HD TVs. Innolux boasts a 70% global market share in this market.

11. Sony (Major electronics company in Japan) 8/27The company has commercialized a new digital camera series, Alpha NEX-5T, with near field communication (NFC) capability for quick data transfer to other mobile devices.

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